The latest Case-Shiller report released this morning showed that home prices rose 3.6% percent nationally between the first and second quarters of 2011, but that second quarter 2011 prices represented a 5.9% drop versus second quarter prices of last year. National prices are now at 2003 levels.

In the DC area, Case-Shiller reports that home prices increased 2.3% from May to June but decreased 1.2% year-over-year.

Case-Shiller June 2011

From David M. Blitzer, Chairman of the Index Committee at S&P Indices:

“This month’s report showed mixed signals for recovery in home prices. No cities made new lows in June 2011, and the majority of cities are seeing improved annual rates…Looking across the cities, eight bottomed in 2009 and have remained above their lows. These include all the California cities plus Dallas, Denver and Washington DC, all relatively strong markets. At the other extreme, those which set new lows in 2011 include the four Sunbelt cities – Las Vegas, Miami, Phoenix and Tampa – as well as the weakest of all, Detroit. These shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together.”

When considering the Case-Shiller findings, recall UrbanTurf’s position on the index. As housing market guru Jonathan Miller has pointed out, the index is really “a foundation for consumer sentiment on the housing market, not an accurate description of the current housing market.” This is because the index is based on closed sales and home price data from 5 to 7 months ago. Another thing that is important to note about Case-Shiller is that the main index only covers single-family home prices, so co-op and condo prices are not included in the analysis that is widely reported. This means that in places like DC, Chicago and New York City where condos/co-ops are prevalent, the index does not offer the most accurate picture of housing prices.

This article originally published at https://dc.urbanturf.com/articles/blog/case-shiller_dc_area_home_prices_decline_1.2_year-over-year/4069

3 Comments

Janson said at 2:12 pm on Tuesday August 30, 2011:

That is a libelous quote. Case Shiller is not a sentiment indicator. It measures literally the changes in sale price for homes repeatedly sold. It is by far the most accurate measure of recent transactions of single family home prices available. Unlike the median sales price reports, which reflect changes in the mix of homes sold, it reflects the changes in price of the same house.

The data is also not “5-7 months old” it consists of an average of three months of closings including closings less than 60 days earlier i.e. the current release includes data from June 30 which is less than two months ago!

Finally, the S&P Case Shiller Condominium sales pair counts definitely include condominium prices and again these don’t reflect median prices, which are useless.

Rob said at 3:47 pm on Tuesday August 30, 2011:

Calling the quote “libelous” is overstating it. But it’s pretty clear that Jonathan Miller has no idea what he’s talking about.

Nikki Smith said at 6:27 pm on Tuesday August 30, 2011:

@Janson - “Libelous” is not what you meant.

From what I’ve read, the Case Shiller report is based on a 3-month rolling period, and a home sold twice in less than six months is excluded from the data. Here’s a link to a lengthy document that describes “Home Price Indices Methodology.” I found Page 17 (Index Construction Process) to be pretty informative.